Mr. Cook. The use of nonrenewable energy resources involves three kinds of real costs: (1) the cost in work of recovery, processing, transport and application in the manner desired, including the work equivaÎent of the necessary equipment; (2) the interest cost on the capital investment required to carry out these processes; and (3) the social costs of resource depletion. All three are rising. Costs of discovering and bringing to the surface new reserves of petroleum and natural gas are increasing exponentially as exploration probes deeper into the Earth's crust (Fig. 6) and moves into the hostile environments of the oceans and the Arctic. The average cost of transporting natural gas from producer to consumer will increase sharply as more liquefied natural gas is brought from Algeria, the Soviet Union, and elsewhere to be mixed with our dwindling domestic supplies. The cost of mining coal by underground methods is increasing as mining goes deeper and as safety requirements decrease productivity. In the October 1972 issue of Mining Engineering it is reported that productivity in underground coal mining decreased 26 percent from 1969 to 1971. Mr. Cook. The cost of strip mining will increase as environmentalprotection requirements become more stringent. The cost of processing fuels and exhaust gases to remove or reduce environmentally detrimental substances is increasing; alternatively, the cost of transporting naturally cleaner fuels long distances, as low-sulfur coal from Montana to Indiana or low-sulfur residual fuel oil from Libya to New England, increases the fuel cost per unit of power produced. Let's look at what is happening in fuel cost in the U.S. electricutility industry. (Fig. 7.) În constant 1960 cents, the cost of fuel in terms of energy "consumed" or used decreased at an almost constant rate from 1960 to 1969; there the curve inverts sharply, increasing in the past 3 years at a rate of about 9 percent per year. |